arcee-ai/sec-data-full · Datasets at Hugging Face

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unit, for aggregate gross proceeds of $85,000. On May 12, 2022, we sold an additional 16,667 units to Mr. Roberts for aggregate gross
proceeds of $50,000. Each unit consists of one (1) series B senior convertible preferred share and a three-year warrant to purchase
one (1) common share at an exercise price of $3.00 per share (subject to adjustment), which may be exercised on a cashless basis under
certain circumstances. Impact
of Coronavirus Pandemic Starting
in late 2019, a novel strain of the coronavirus, or COVID-19, began to rapidly spread around the world and every state in the United States.
Most states and cities have at various times instituted quarantines, restrictions on travel, “stay at home” rules, social
distancing measures and restrictions on the types of businesses that could continue to operate, as well as guidance in response to the
pandemic and the need to contain it. At this time, there continues to be significant volatility and uncertainty relating to the full
extent to which the COVID-19 pandemic and the various responses to it will impact our business, operations and financial results. Asien’s
was qualified as an essential business and remained open during the pandemic, with certain occupancy restrictions at times, so it did
not experience any meaningful business interruption. However, Asien’s is dependent upon suppliers to provide it with all of the
products that its sells. The pandemic has impacted and may continue to impact suppliers and manufacturers of certain of its products.
As a result, Asien’s has faced and may continue to face delays or difficulty sourcing certain products, which could negatively
affect its business and financial results. Even if Asien’s is able to find alternate sources for such products, they may cost more,
which could adversely impact Asien’s profitability and financial condition. Kyle’s
was also qualified as an essential business and remained open during the pandemic, with certain occupancy restrictions at times, so it
did not experience any meaningful business interruption. However, certain key customers of Kyle’s elected to either temporarily
stop building homes or delayed their building process, particularly during the second quarter of 2020, which adversely affected Kyle’s
sales. Further, early on during the pandemic, several of Kyle’s employees had taken time off because of medical issues, and some
of them did not return to employment. Kyle’s has been hiring and training new employees to replace lost productivity because of
the aforementioned loss of employees. Kyle’s did not experience any meaningful business interruption related to any of its key
suppliers; although recently, potentially as a result of the pandemic and resulting impact, Kyle’s has seen price increases in
certain key raw materials such as wood products and hardware. These increases may negatively affect Kyle’s profitability and financial
condition. If the pace of the pandemic does not continue to slow, it may continue to negatively affect Kyle’s ability to generate
sales opportunities and to hire productive employees, as well as impact the cost of raw materials. Therefore, Kyle’s business operations
may experience further delays and experience lost sales opportunities and increased costs, which could further adversely impact Kyle’s
profitability and financial condition. High
Mountain was qualified as an essential business and remained open during the pandemic. As it followed both federal and Nevada state guidelines
regarding occupancy restrictions, it did not experience significant business disruptions, although it did experience some loss of productivity
due to employee absences. High Mountain continues to comply with Nevada state and CDC guidelines regarding workplace safety. Innovative
Cabinets was also qualified as an essential business and thus remained open during the pandemic, while complying with federal and Nevada
state guidelines regarding occupancy restrictions. However, since a substantive amount of its materials come from Asia, where its manufacturing
network is located, Innovative Cabinets did experience longer supply chain lead-times and higher logistics costs. It has been exploring
alternative sourcing opportunities. Given the prevailing market conditions for building supplies and materials, it may continue to experience
supply chain issues and higher supply costs, which could adversely impact its profitability and financial condition. 22 Wolo
qualified as an essential business and remained open during the pandemic. At no time during the pandemic did it experience an internal
contamination forcing it to stop its business. The pandemic has had a dramatic impact on Wolo’s supply chain as it has on others
in the automotive aftermarket. Approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports
in the U.S. due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing
a backlog of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available
space on ships has escalated shipping costs by over 300% from 2020. Costs for raw materials have also started to increase due to availability.
Wolo cannot absorb these increases and began passing on a price increase to customers starting June 1, 2021, although the effective date
may be later for some customers. We believe that this is an industry-wide issue and that it should not put Wolo in an unfavorable pricing
position. The
spread of COVID-19 has also adversely impacted global economic activity and has contributed to significant volatility and negative
pressure in financial markets. The pandemic has resulted, and may continue to result, in a significant disruption of global financial
markets, which may reduce our ability to access capital in the future, which could negatively affect our liquidity. The
extent to which the pandemic may impact our results will depend on future developments, which are highly uncertain and cannot be
predicted as of the date of this report, including the effectiveness of vaccines and other treatments for COVID-19, and other new information
that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact,
among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments
in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition,
results of operations and cash flows. Management
Fees On
April 15, 2013, the Company and the Manager entered into a management services agreement, pursuant to which the Company is required to
pay the Manager a quarterly management fee equal to 0.5% of its adjusted net assets for services performed (the “Parent Management
Fee”). The amount of the Parent Management Fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any
management fees received by the Manager under any offsetting management services agreements with respect to such fiscal quarter, (ii)
reduced (or increased) by the amount of any over-paid (or under-paid) Parent Management Fees received by (or owed to) the Manager as
of the end of such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid Parent Management Fees. The
Company expensed $0 in Parent Management Fees for the three months ended March 31, 2022 and 2021. 1847
Neese entered into an offsetting management services agreement with the Manager on March 3, 2017, which is included in discontinued operations,
1847 Asien entered into an offsetting management services agreement with the Manager on May 28, 2020, 1847 Cabinet entered into an offsetting
management services agreement with the Manager on August 21, 2020 (which was amended and restated on October 8, 2021) and 1847 Wolo entered
into an offsetting management services agreement with the Manager on March 30, 2021. Pursuant to the offsetting management services agreements,
1847 Neese appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500, 1847 Asien appointed
the Manager to provide certain services to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets
(as defined in the management services agreement), 1847 Cabinet appointed the Manager to provide certain services to it for a quarterly
management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the management services agreement), which
was increased to $125,000 or 2% of adjusted net assets on October 8, 2021, and 1847 Wolo appointed the Manager to provide certain services
to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the management services
agreement); provided, however, in each case that if the aggregate amount of management fees paid or to be paid by such entities, together
with all other management fees paid or to be paid to the Manager under other offsetting management services agreements, exceeds, or is
expected to exceed, 9.5% of our gross income in any fiscal year or the Parent Management Fee in any fiscal quarter, then the management
fee to be paid by such entities shall be reduced, on a pro rata basis determined by reference to the other management fees to be paid
to the Manager under other offsetting management services agreements. 23 Each
of these subsidiaries shall also reimburse the Manager for all of their costs and expenses which are specifically approved by their board
of directors, including all out-of-pocket costs and expenses, which are actually incurred by the Manager or its affiliates on behalf
of these subsidiaries in connection with performing services under the offsetting management services agreements. 1847
Asien expensed management fees of $75,000 and $75,000 for the three months ended March 31, 2022 and 2021, respectively. 1847
Cabinet expensed management fees of $125,000 and $75,000 for the three months ended March 31, 2022 and 2021, respectively. 1847
Wolo expensed management fees of $75,000 for the three months ended March 31, 2022. On
a consolidated basis, the Company expensed total management fees of $275,000 and $260,000 for the three months ended March 31, 2022 and
2021, respectively. Segments The
Financial Accounting Standards Board, or FASB, Accounting Standard Codification, or ASC, Topic 280, Segment Reporting , requires
that an enterprise report selected information about reportable segments in its financial reports issued to its shareholders. As of March
31, 2022, we have three reportable segments - the retail and appliances segment, which is operated by Asien’s, the construction
segment, which is operated by Kyle’s, High Mountain and Innovative Cabinets, and the automotive supplies segment, which is operated
by Wolo. The retail
and appliances segment is comprised of the business of Asien’s, which is based in Santa Rosa, California, and provides a wide variety
of appliance services including sales, delivery, installation, service and repair, extended warranties, and financing. The construction
segment is comprised of the businesses of Kyle’s, High Mountain and Innovative Cabinets. Kyle’s, which is based in Boise,
Idaho, provides a wide variety of construction services including custom design and build of kitchen and bathroom cabinetry, delivery,
installation, service and repair, extended warranties, and financing. High Mountain, which is based in Reno, Nevada, specializes in all
aspects of finished carpentry products and services, including doors, door frames, base boards, crown molding, cabinetry, bathroom sinks
and cabinets, bookcases, built-in closets, and fireplace mantles, among others, as well as window installation. Innovative Cabinets,
also based in Reno, Nevada, specializes in custom cabinetry and countertops. The
automotive supplies segment is comprised of the business of Wolo, which is based in Deer Park, New York, and designs and sells horn and
safety products (electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency and safety warning

unit, for aggregate gross proceeds of $85,000. On May 12, 2022, we sold an additional 16,667 units to Mr. Roberts for aggregate gross

proceeds of $50,000. Each unit consists of one (1) series B senior convertible preferred share and a three-year warrant to purchase

one (1) common share at an exercise price of $3.00 per share (subject to adjustment), which may be exercised on a cashless basis under

certain circumstances. Impact

of Coronavirus Pandemic Starting

in late 2019, a novel strain of the coronavirus, or COVID-19, began to rapidly spread around the world and every state in the United States.

Most states and cities have at various times instituted quarantines, restrictions on travel, “stay at home” rules, social

distancing measures and restrictions on the types of businesses that could continue to operate, as well as guidance in response to the

pandemic and the need to contain it. At this time, there continues to be significant volatility and uncertainty relating to the full

extent to which the COVID-19 pandemic and the various responses to it will impact our business, operations and financial results. Asien’s

was qualified as an essential business and remained open during the pandemic, with certain occupancy restrictions at times, so it did

not experience any meaningful business interruption. However, Asien’s is dependent upon suppliers to provide it with all of the

products that its sells. The pandemic has impacted and may continue to impact suppliers and manufacturers of certain of its products.

As a result, Asien’s has faced and may continue to face delays or difficulty sourcing certain products, which could negatively

affect its business and financial results. Even if Asien’s is able to find alternate sources for such products, they may cost more,

which could adversely impact Asien’s profitability and financial condition. Kyle’s

was also qualified as an essential business and remained open during the pandemic, with certain occupancy restrictions at times, so it

did not experience any meaningful business interruption. However, certain key customers of Kyle’s elected to either temporarily

stop building homes or delayed their building process, particularly during the second quarter of 2020, which adversely affected Kyle’s

sales. Further, early on during the pandemic, several of Kyle’s employees had taken time off because of medical issues, and some

of them did not return to employment. Kyle’s has been hiring and training new employees to replace lost productivity because of

the aforementioned loss of employees. Kyle’s did not experience any meaningful business interruption related to any of its key

suppliers; although recently, potentially as a result of the pandemic and resulting impact, Kyle’s has seen price increases in

certain key raw materials such as wood products and hardware. These increases may negatively affect Kyle’s profitability and financial

condition. If the pace of the pandemic does not continue to slow, it may continue to negatively affect Kyle’s ability to generate

sales opportunities and to hire productive employees, as well as impact the cost of raw materials. Therefore, Kyle’s business operations

may experience further delays and experience lost sales opportunities and increased costs, which could further adversely impact Kyle’s

profitability and financial condition. High

Mountain was qualified as an essential business and remained open during the pandemic. As it followed both federal and Nevada state guidelines

regarding occupancy restrictions, it did not experience significant business disruptions, although it did experience some loss of productivity

due to employee absences. High Mountain continues to comply with Nevada state and CDC guidelines regarding workplace safety. Innovative

Cabinets was also qualified as an essential business and thus remained open during the pandemic, while complying with federal and Nevada

state guidelines regarding occupancy restrictions. However, since a substantive amount of its materials come from Asia, where its manufacturing

network is located, Innovative Cabinets did experience longer supply chain lead-times and higher logistics costs. It has been exploring

alternative sourcing opportunities. Given the prevailing market conditions for building supplies and materials, it may continue to experience

supply chain issues and higher supply costs, which could adversely impact its profitability and financial condition. 22 Wolo

qualified as an essential business and remained open during the pandemic. At no time during the pandemic did it experience an internal

contamination forcing it to stop its business. The pandemic has had a dramatic impact on Wolo’s supply chain as it has on others

in the automotive aftermarket. Approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports

in the U.S. due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing

a backlog of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available

space on ships has escalated shipping costs by over 300% from 2020. Costs for raw materials have also started to increase due to availability.

Wolo cannot absorb these increases and began passing on a price increase to customers starting June 1, 2021, although the effective date

may be later for some customers. We believe that this is an industry-wide issue and that it should not put Wolo in an unfavorable pricing

position. The

spread of COVID-19 has also adversely impacted global economic activity and has contributed to significant volatility and negative

pressure in financial markets. The pandemic has resulted, and may continue to result, in a significant disruption of global financial

markets, which may reduce our ability to access capital in the future, which could negatively affect our liquidity. The

extent to which the pandemic may impact our results will depend on future developments, which are highly uncertain and cannot be

predicted as of the date of this report, including the effectiveness of vaccines and other treatments for COVID-19, and other new information

that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact,

among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments

in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition,

results of operations and cash flows. Management

Fees On

April 15, 2013, the Company and the Manager entered into a management services agreement, pursuant to which the Company is required to

pay the Manager a quarterly management fee equal to 0.5% of its adjusted net assets for services performed (the “Parent Management

Fee”). The amount of the Parent Management Fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any

management fees received by the Manager under any offsetting management services agreements with respect to such fiscal quarter, (ii)

reduced (or increased) by the amount of any over-paid (or under-paid) Parent Management Fees received by (or owed to) the Manager as

of the end of such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid Parent Management Fees. The

Company expensed $0 in Parent Management Fees for the three months ended March 31, 2022 and 2021. 1847

Neese entered into an offsetting management services agreement with the Manager on March 3, 2017, which is included in discontinued operations,

1847 Asien entered into an offsetting management services agreement with the Manager on May 28, 2020, 1847 Cabinet entered into an offsetting

management services agreement with the Manager on August 21, 2020 (which was amended and restated on October 8, 2021) and 1847 Wolo entered

into an offsetting management services agreement with the Manager on March 30, 2021. Pursuant to the offsetting management services agreements,

1847 Neese appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500, 1847 Asien appointed

the Manager to provide certain services to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets

(as defined in the management services agreement), 1847 Cabinet appointed the Manager to provide certain services to it for a quarterly

management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the management services agreement), which

was increased to $125,000 or 2% of adjusted net assets on October 8, 2021, and 1847 Wolo appointed the Manager to provide certain services

to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the management services

agreement); provided, however, in each case that if the aggregate amount of management fees paid or to be paid by such entities, together

with all other management fees paid or to be paid to the Manager under other offsetting management services agreements, exceeds, or is

expected to exceed, 9.5% of our gross income in any fiscal year or the Parent Management Fee in any fiscal quarter, then the management

fee to be paid by such entities shall be reduced, on a pro rata basis determined by reference to the other management fees to be paid

to the Manager under other offsetting management services agreements. 23 Each

of these subsidiaries shall also reimburse the Manager for all of their costs and expenses which are specifically approved by their board

of directors, including all out-of-pocket costs and expenses, which are actually incurred by the Manager or its affiliates on behalf

of these subsidiaries in connection with performing services under the offsetting management services agreements. 1847

Asien expensed management fees of $75,000 and $75,000 for the three months ended March 31, 2022 and 2021, respectively. 1847

Cabinet expensed management fees of $125,000 and $75,000 for the three months ended March 31, 2022 and 2021, respectively. 1847

Wolo expensed management fees of $75,000 for the three months ended March 31, 2022. On

a consolidated basis, the Company expensed total management fees of $275,000 and $260,000 for the three months ended March 31, 2022 and

2021, respectively. Segments The

Financial Accounting Standards Board, or FASB, Accounting Standard Codification, or ASC, Topic 280, Segment Reporting , requires

that an enterprise report selected information about reportable segments in its financial reports issued to its shareholders. As of March

31, 2022, we have three reportable segments - the retail and appliances segment, which is operated by Asien’s, the construction

segment, which is operated by Kyle’s, High Mountain and Innovative Cabinets, and the automotive supplies segment, which is operated

by Wolo. The retail

and appliances segment is comprised of the business of Asien’s, which is based in Santa Rosa, California, and provides a wide variety

of appliance services including sales, delivery, installation, service and repair, extended warranties, and financing. The construction

segment is comprised of the businesses of Kyle’s, High Mountain and Innovative Cabinets. Kyle’s, which is based in Boise,

Idaho, provides a wide variety of construction services including custom design and build of kitchen and bathroom cabinetry, delivery,

installation, service and repair, extended warranties, and financing. High Mountain, which is based in Reno, Nevada, specializes in all

aspects of finished carpentry products and services, including doors, door frames, base boards, crown molding, cabinetry, bathroom sinks

and cabinets, bookcases, built-in closets, and fireplace mantles, among others, as well as window installation. Innovative Cabinets,

also based in Reno, Nevada, specializes in custom cabinetry and countertops. The

automotive supplies segment is comprised of the business of Wolo, which is based in Deer Park, New York, and designs and sells horn and

safety products (electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency and safety warning